National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: 7 Use of the Poverty Measure in Government Assistance Programs

Suggested Citation:"7 Use of the Poverty Measure in Government Assistance Programs." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 317

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USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS 317 7 Use of the Poverty Measure in Government Assistance Programs The current official U.S. poverty measure has been not only an important statistical indicator; it has also had direct policy uses in government programs that are designed to help low-income families whose resources fall below a standard of need. Many programs have their own need standard for eligibility, but a significant number link their standard to the official poverty thresholds (or a multiple of them). In most cases, the link is actually to the poverty guidelines derived from the thresholds, and, consequently, we use the term guidelines in this chapter.1 Another program use of the poverty measure has been for allocation of federal funds to states and localities. For example, funds for educationally deprived children under the Elementary and Secondary Education Act are allocated to school districts on the basis of their share of children aged 5-17 who live in poor families. Head Start funds are also allocated to states by a formula that takes account of each state's share of children under age 18 in families receiving Aid to Families with Dependent Children (AFDC) and its share of children under age 6 in poor families. The share of poor people is also one factor in the formula for allocating Community Development Block Grant funds to cities and counties. In this chapter we consider the relationship of a poverty measure to eligibility and benefit standards for government means-tested programs that 1 The poverty guidelines are issued annually by the U.S. Department of Health and Human Services (HHS) by smoothing the official poverty thresholds for different-size families. The guidelines are higher than the thresholds for Alaska (by 25%) and Hawaii (by 15%).

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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of:

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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